Highlights of Libra Senate Hearing: Day 2

U.S. lawmakers held another day of heated questioning over Facebook’s plans. The 2nd day of Facebook Libra’s Senate hearing was majorly focused on the difference between Libra and cryptocurrency. On 17th July, the Libra Senate hearing started with a bullish note for bitcoin.

CongressmanPatrick McHenry claimed that,

The world that Satoshi Nakamoto envisioned, and others are building, is an unstoppable force. We should not attempt to deter this innovation, and governments cannot stop this innovation, and those that have tried already failed.”

On the 2nd day, David Marcus, head of their Calibra wallet, began his Q&A session with the U.S. House Financial Services Committee.

Congressman Gonzalez was the first to initiate the session. According to Gonzalez, the idea behind Libra is quite impressive but the idea of central governance makes it different from a typical cryptocurrency. He asked Marcus…

Is Libra Decentralized or governed?

In response to this, Marcus responded clearly that while Libra was meant to be on a permissionless network, there would indeed be some form of centralization due to the presence of a fiat currency reserve for every unit of Libra formed.

According to Marcus, this was to ensure that Libra keeps principles to regulations.

Further, congressman Gonzalez questioned about users data breach between Facebook and Libra. David replied that no financial data of Libra users would be shared, not even with Facebook.

As the hearing progressed, the questions raised related to issues of distinguishing between Libra and a typical cryptocurrency. Congressman Hollingsworth asked…

How Libra is different from other cryptocurrencies like bitcoin?

David used two approaches to explain this. He claimed first, that Libra was a stable coin backed by the U.S. Dollar and secondly, it has a blockchain designed for speed and scale.

Further, the question came about whether Libra can be trusted?

David Marcus confirmed that there is no data sharing between the subsidiary and Facebook. He also listed a few reasons why Libra should be trusted. David said that they wanted the Calibra association to be successful and are committed to fulfilling every promise made to that respect.

Congressman Green asked,

How would Libra impact the dollar? Do we give up our supremacy in exchange for a cryptocurrency?

David Marcus answered in a simple way saying: No, Libra would not impact dollar and further explained that Libra was not in a currency competition with the U.S. Dollar or any other currencies.

Meanwhile, a young Democrat pointed out the comparison between Libra and ‘company scrip’.

She further continued asking “You stated yesterday in front of the Senate Committee that you would be open to accepting 100% of your pay in Libra. In the history of this country, there is a term for being paid in a corporate-controlled currency, It’s called ‘scrip’. The idea that your pay could be controlled by a corporation instead of a sovereign government. Do you think that there is any risk here?”.

She also asked Marcus about technical details about Libra. He claimed that

“sovereign currency should remain sovereign”, but didn’t give an opinion on whether Libra should be considered a public good.

Final Thoughts

Overall, by looking at the complete view of both the days of the hearing, David Marcus, spent much of his time at congressional hearings this week. Marcus tried to explain how Libra would actually work. He said repeatedly that he wants to work with Congress and regulators to get Libra off the ground, and has no plans to debut the new currency before regulatory bodies are satisfied.